President Joko Widodo has taken several steps to ensure a smooth acceleration in economic growth. One of the things that the president has done is to release Presidential Decree Number 11 of 2021 on the Task Force for Investment Acceleration on 4 May 2021. This decree appoints Bahil Lahadalia as the Head of Investment Acceleration Task Force.
As the head of the task force, Bahlil Lahadalia, releases a decree (Keputusan Ketua Satgas Percepatan Investasi No.121/2021) to form an investment acceleration implementation team. The team consists of a number of representatives across ministries/agencies (K/L), the National Police, and the attorney general’s office.
Indonesia’s Investment Acceleration Task Force will attend to problems related to capital investment. The task force has established 3 main criterias to determine the project’s priority. These criterias are investment plans that encourage import substitution, export-oriented, or absorb a minimum of 3,000 workers. Authority given to the task force includes but is not limited to coordinating and making decisions related to investment realization that must be immediately followed up by K/L, regional authorities, and regional governments. All of these authorities are oriented towards accelerating investment realization.
Indonesia’s Priority Investment List
Under the Presidential Regulation No. 49/2021, the Indonesian government has just launched an investment priority list. Previously, there had been over 20 closed sectors on the negative investment list regulated under the Presidential Regulation No. 44/2016. This regulation has created barriers for investors to invest in Indonesia.
The government and the Ministry of Investment/BKPM have created a list of industries to be prioritized. Investors who invest in the priority sectors will be eligible to receive incentives, such as tax holidays, allowances, import duty exemptions, and or non-fiscal incentives in the form of ease of obtaining business licenses, work permits, supporting infrastructure, and guaranteed energy supply or raw materials.
More investors need to be invited to participate in the country’s economic growth. The government tackles this by speeding up licensing and administrative processes by ensuring licensing certainty, ease of access, and transparency.
Sectors Open for Investment
Currently, according to Presidential Regulation Number 49 of 2021 on Amendment of the Presidential Regulation Number 10 of 2021 on Investment Business Fields, there are a total of 246 business fields in the investment priority list. These business fields are eligible to get the Tax Holiday, Tax Allowance, and Investment Allowance.
There are 182 business fields in 106 business field groups allocated to or partnership with Small and Medium-sized Enterprises (SMEs). The government makes this decision based on three things: 1) industries using simple technology, 2) business activities with a particular process, which employs many workers, and owns an exclusive cultural heritage passed down from generation to generation, 3) businesses with less than Rp10 billion as the working capital (excluding land and building).
It is hoped that the opening of the investment priority list will make Indonesia a promising place for investment. Investors can rest at ease knowing that they will receive full support and incentives from the Indonesian government.